The Asian Development Bank has published its latest report, “Asian Development Outlook (ADO) July 2024: Steady Growth, Slowing Inflation,” in which it has increased its forecast for economic growth in Central Asia from 4.3% to 4.5% in 2024.
In the first quarter (Q1) of 2024, the Kyrgyz Republic is expected to have grown at a rate of 8.8% thanks to robust service and construction industry output supported by both foreign and domestic investment. Other regional economies have also experienced solid economic activity. As a result of a notable increase in exports, which included gold sales, Tajikistan maintained its robust economic trajectory in Q1 2024, with an 8.2% growth rate. Net gas exports and government investment, meanwhile, are Turkmenistan’s primary sources of growth. The first quarter of 2024 also saw 6.2% growth in Uzbekistan, due to a spike in fixed capital investment.
The growth prospects of Kazakhstan, however, the largest economy in the region, remain unchanged. With the main growth drivers being construction, manufacturing, and services, GDP expanded by 3.7% in Q1 2024. This year, manufacturing and construction will continue to be the primary forces behind economic expansion. Strong building growth will be supported by government assistance to victims and restoration of damaged infrastructure following the worst floods in thirty years. Mining is also anticipated to contribute significantly to Kazakhstan’s medium-term growth following the Tengiz oil field expansion project’s completion in Q2 2025.
The ADB has also lowered inflation forecasts for 2024 and 2025. In May 2024, the Kyrgyz Republic experienced a decrease in inflation from 11.3% to 4.6%, primarily due to fluctuations in the prices of essential commodities. Other regional economies are also experiencing a reduction in inflationary pressures. A steady exchange rate and relatively restrictive monetary policy decreased Kazakhstan’s inflation rate to 9.0% from 18.5% from 2023 to January–May 2024. Inflation in Tajikistan for the first four months of 2024 was 3.8%. Inflation in Uzbekistan has also dropped from 11.4% in the previous year to 9.2% in the first five months of 2024.
